One question is being asked by employers on a nearly daily basis: “Do we really have to meet the December 1, 2016 effective deadline for the revisions to the U.S. Department of Labor (DOL) overtime regulations?” Short answer is: Yes.
Attempts are being made to delay, change, soften, and eliminate the December 1 implementation date, but so far, without success. Here is a summary of some of the legal and legislative actions that have taken place since the May 18, 2016 publication of the new regulations:
- In June, Senator Lamar Alexander (R-Tenn.) and 43 other Senate Republicans filed a “motion of disapproval” under the Congressional Review Act (CRA), an Act that allows lawmakers to vote to roll back controversial regulations. Under the CRA, Republicans would need only a simple majority in both chambers to block the overtime rule. But President Obama could veto their attempt to block it, and Republicans do not have enough support on their own to override a veto. To date, no further action has been taken on that motion.
- On July 14, 2016, in an attempt to soften the impact of the new regulations, Congressman Kurt Schrader (D-Ore.) introduced a bill – the Overtime Reform and Enhancement Act (OREA) – to add to the regulations a phase-in provision which would phase in the increase in the salary threshold in steps over the next three years, and remove a current provision that increases the threshold salary automatically every three years. After its introduction in the House, the Bill was referred to the House Committee on Education and the Workforce; no further action has been taken.
- On September 20, with less than 80 days left before the effective date for the revisions to the new regulations, two federal court lawsuits were filed in Texas to put off or halt the implementation of the revisions. On October 14, motions were filed by both plaintiff groups, asking for expedited resolution. To date, neither has resulted in any concrete change in the trajectory of the implementation of the new rules.
- On September 28, 2016, the U.S. House of Representatives passed H.R. 6094 Regulatory Relief for Small Businesses, Schools, and Nonprofits Act by a vote of 246 to 177. This bill would delay the December 1, 2016 effective date of the new salary level test in the final overtime rule for six months until June 1, 2017. While H.R. 6094 passed the House, it is not clear whether the Senate will vote on its parallel Senate bill (S. 3462). Even if the Senate were to vote on that and pass it, the White House has made it clear in a Statement of Administration Policy dated September 27 that the president will veto it.
- On September 29, 2016, another bill (S. 3464) was introduced by Senator Lamar Alexander, along with four other senators. That bill is similar to the House bill introduced in July by Rep. Schrader (D-OR) to phase in the overtime rule incrementally. The Senate bill includes a five-year phase-in (as opposed to Rep. Schrader’s 3-year period), but also a provision requiring an independent study of the rule after the first year of implementation, which – should the rule be found to negatively impact American workers and the economy – exempt nonprofit groups (including colleges and universities), state and local governments, and many Medicaid and Medicare-eligible facilities from any further increases under the rule.
Before recessing for the November elections, Congress signaled that the overtime rule will merit Congressional attention when it returns to work for its lame-duck session beginning in mid-November. In the meantime, business and industry groups, including the Society for Human Resource Management (SHRM) will continue to develop strategies for use when Congress returns to Washington following the elections.
However, because of the number of steps that must be taken prior to an change in the December 1 effective date (which actually is earlier, since the rule requires the changes to be in place for the pay period that includes December 1), that date is unlikely to change. Be prepared.
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Photo from 2012 London Olympics at daily mail.com.